Texas Economic Index Declines
The latest numbers produced monthly by Comerica Bank show the Texas Economic Activity Index continues to decline and pessimism reigns.
Related: Texas Severance Taxes Fall ~49%
The Economic Index fell 1.2 percentage points in December to 92.8. The index averaged 97.7 points for all of 2015 and measures variables such as non-farm payrolls, exports, hotel occupancy rates, unemployment insurance claims, housing starts, sales tax revenues, home prices, and the state rig count.
“Our Texas Economic Activity Index declined again in December, now down 13 out of the last 14 months. This is strong evidence that the collapse of oil prices is dampening economic growth in Texas. Payroll employment and house prices were the two positive components of the index in December.” said Robert Dye, Chief Economist at Comerica Bank. “2016 will be a transitional year for the Texas economy as it adjusts to lower oil prices for longer.”
In December, business executives expressed optimism regarding future business conditions, but the latest Texas Outlook Survey, manufacturers reiterated their deeply pessimistic view of current business conditions as the downturn affects many sectors.
“An anonymous comment by a machine manufacturer said that “It’s a tough time in the oil patch. We plan on cutting 20 percent of staff this month after cutting 25 percent a year ago. We are not sure how we can sustain our skill sets with these dramatic troughs.”